In a conventional credit card transaction, a credit card holder presents a financial account card, such as a credit card or debit card, to a merchant. The merchant typically swipes a magnetic stripe on the card through a card reader that is built into or attached to a point-of-sale (POS) terminal. The magnetic stripe generally includes account information, such as an account number of the card, an identity of the card holder, and an expiration date of the card. Once the merchant has swiped the card through the card reader, the account information is transmitted to the POS terminal. Alternatively, instead of the merchant swiping the card, the credit card holder may personally swipe the card at a self-service check out station or may insert the card into a card reader built into, for example, a gasoline pump. Once the card reader has read the card data, the card data is transmitted over a secure network, authenticated, and ultimately used to authorize a transaction. In any of these kinds of transactions, however, the credit card must be physically read by a magnetic stripe reader in order to obtain the card data that is stored on the magnetic stripe.
As the prevalence of wireless devices continues to increase, new methods of storing and transmitting data have begun to emerge. One such example is to use RFID (radio frequency identification) tags for transmitting information. RFID tags are microchips, some versions of which may store and encrypt data. Some wireless devices may also transmit information wirelessly using other technology such as Bluetooth, Wi-Fi, near field communication (NFC), and cellular technologies such as CDMA, TDMA, LTE, GSM, for example. In some cases a wireless device, such as cellular phone, tablet, or laptop, for example, can store and securely transmit card data using encryption techniques to a POS terminal. Accordingly, a wireless device storing credit card data may be used as a payment device without requiring the actual credit card to be swiped by a magnetic card reader. As most wireless devices have the capacity to store card data for more than one financial account card, they can act as an “electronic wallet” allowing a consumer to choose card data from one or more available financial cards to use in transaction, similar to the consumer choosing a traditional, plastic credit card from her wallet.
The use of wireless devices as electronic wallets provides the opportunity to store data related to financial account cards in addition to the card data for the financial account card data. One example of this additional data is rewards program data. Rewards programs provide an incentive to use a financial account card. A rewards program typically awards points when the financial account card is used that the financial account card holder can later redeem. For example, a classic rewards program is a frequent flyer miles program; a consumer might earn a mile for every dollar spent and the consumer can redeem earned miles for a free flight. Some consumers have multiple financial account cards each with their own rewards program. For example, a first financial account card might have a first rewards program that offers points for gasoline purchases, a second financial account card might have a second rewards program that offers points for grocery purchases, and a third financial account card might have a third rewards program that offers points on all purchases. Some rewards programs can offer a different reward based on the type of purchase. For example, a rewards program might offer one point per dollar spent for all purchases, two points per dollar spent for grocery purchases, and three points per dollar spent for gasoline purchases.